The Insurance Council of British Columbia is continuing to hand down decisions related to agents who helped facilitate the export of high end and luxury vehicles to the grey market, this time sanctioning Yu Hun (Raymond) Cheung and his daughter, Ka Hing Cheung, along with their agency, King Insurance Services (2015) Ltd.

The council notes that the agents, beyond processing inappropriate insurance transactions, were not part of the broader export scheme. Their behaviour towards the Insurance Corporation of British Columbia (ICBC) in its investigation into their actions, however, was noted by the council as an aggravating factor. (Raymond Cheung, known as RC in the decision documents, first described the corporation’s actions as “unfair” and “cold blooded”. The pair have since repaired their relationship with the corporation.)

License downgrades 

The pair are also being sanctioned with license downgrades for sharing ICBC broker user identification numbers and for completing a series of transactions related to their own vehicle insurance. Ka Cheung (KC) was also sanctioned for completing ICBC business for her father while being prohibited from doing so and for placing insurance contrary to client instructions.

RC, formerly a level 3 general insurance agent first licensed in August 1989, had his license downgraded to a level 1 general salesperson’s license. KC, a level 2 general insurance agent, first licensed in June 2002, also had her license downgraded, both for a period of one year. Both agents were also required to complete remedial coursework. The agency was assessed a fine in the amount of $10,000 and investigation costs totalling $4,675.

The decision notes that between 2020 and 2022, both agents issued a series of one-year Autoplan policies for vehicles that were not intended for operation on a British Columbia highway. The policies were cancelled within days with other brokers, often on the same day of issue.

According to the ICBC, many of the policies were rated in territories and rate classes which resulted in higher premiums. (Although not noted in the Cheung’s case, in similar cases it is noted that the refunded amounts could be a way of laundering money.)

RC is accused of issuing nine, one-year policies where a temporary operating permit (TOP) should’ve been issued instead. KC reportedly issued 48 of the same policies. Eight of KC’s 48 transactions were conducted after an interview with the ICBC, wherein its special investigation unit officers warned the pair against the practice of issuing one-year policies. KC told the council that she did ask the client if the coverage was appropriate, but the client still requested one-year policies.

“Licensee KC told council’s investigator that, at the time, she was confident she understood ICBC’s instructions and was following them, but that in hindsight, admitted that she may have misunderstood,” the intended decision states. It goes on to note that the pair were willfully blind towards suspicious behaviours because of the income the transactions brought them.

Ignored a client’s instructions 

In the unrelated matter where KC ignored a client’s instructions to cancel their policy (KC instead increased liability coverage, removed hit and run coverage and added collision coverage without the client’s consent), she told the investigators that the consequences of being under-insured were severe, that the client didn’t know what they wanted and that she didn’t feel comfortable cancelling their policy.

“Even though licensee KC described client FA as frequently changing her mind, and thought that it was in client FA’s best interest to ignore her instructions, licensee KC had no authority to make changes to client FA’s policy without her consent,” the intended decision states.

Mitigating factors 

Overall, the council said mitigating factors outweighed aggravating factors in the case. “Particularly significant was the fact that the licensees have made great efforts to transform the agency since being sanctioned by the ICBC,” the intended decision states, noting the pair’s remediation plan with the corporation, efforts to hire a new nominee and staff with relevant experience and having RC step away from Autoplan business. “These changes indicate, in council’s opinion, that the licensees were repentant about their failings and committed to improving their vehicle insurance services.”

Related: